Oil drops on rising USA drilling, steady OPEC supply

Tax Breaks Could Save U.S. Oil Industry Billions

Brent crude is trading at about $52 a barrel.

Russia, the largest of the 11 outside producers working with OPEC, has not publicly said whether it supports extending the supply cut, but is wary about the revival of US shale output due to higher oil prices.

Two weeks ago, there were indications that OPEC's deal to cut oil prices was falling out after Saudi Arabia's energy minister, Khalid al-Falih started riling other participants in the deal for not keeping their ends of the bargain. OPEC was also able to work out a deal with a consortium of non-OPEC producers such as Russian Federation and Venezuela to cut their production. It continues to be flooded with oil. With current supply and demand trends, OPEC can hope for, at best, a reduction of about 500,000 barrels a day.

The markets took some comfort yesterday, when Falih said that the production cuts can be extended, if necessary, according to Bloomberg News.

Last week speculators cut more than 150,000 contracts betting on firmer US and Brent oil prices, a record high.

"OPEC heavyweights such as Saudi Arabia are not happy with the return of shale oil in full force and have to make a hard choice between losing part of their market share or steady income", said a source from a major non-Gulf OPEC producer.

More news: Gauging the Impact of the Fed's Rate Hikes

An upgrade in non-OPEC supply prospects also led analysts at J.P. Morgan to cut their 2017 and 2018 price forecasts to $55.75 and $55.50 for Brent and to $53.75 and $53.50 for WTI, respectively.

"The recovery path of US tight oil is key to rebalancing the oil market over 2017, so is the compliance of the 11 non-OPEC countries that agreed to curb output", the IEA said.

Traders continue to worry about OPEC's ability to reduce the supply glut and extend the deal for another six months.

Analysts say speculative investors are likely to keep reducing bullish positions, thanks to optimism amongst USA producers boosting drilling activity, which in part will offset OPEC attempts at reducing supply.

Beyond OPEC, oil production rose 90,000 bpd in February, as increasing USA output offset declines elsewhere.

"I think oil is reacting still to the steady rise in the US rig count and the realization that momentum is building to the downside from the repositioning of speculative interests in the market", said John Kilduff, partner at Again Capital in NY. Hence, oil prices can start climbing up if OPEC can pull off another deal in which members agree to deepen or extend the production cuts.

Related News:

  • Roughly half of Canadians want illegal border crossers deported

    Roughly half of Canadians want illegal border crossers deported

    The minister's office adds that if someone doesn't have a valid asylum claim then the deportation begins. He told Reuters there are many who want to come into Canada legally by going through the correct process.
    Every 45 minutes, a child is poisoned by opioids as epidemic grows

    Every 45 minutes, a child is poisoned by opioids as epidemic grows

    Doctors say the study highlights the importance of making sure kids don't have access to any medications. They also said physicians need to be more discriminate about handing out prescriptions.
    Spicer says Trump campaign chairman actually played 'limited role'

    Spicer says Trump campaign chairman actually played 'limited role'

    Trump said while campaigning for president that if he won, he would probably be too busy doing the people's business to golf. Spokesman Sean Spicer said that "where ever the president goes, (he) carries the apparatus of the White House ".
  • Oregon Ducks enter Sweet 16 as 1-point underdog against MI

    Oregon Ducks enter Sweet 16 as 1-point underdog against MI

    The eighth-seeded Wisconsin Badgers knocked off top-seed Villanova, last-year's tournament champion, to advance to the next round. Bryce Alford broke out of his shooting slump to score 16 points on 5-of-13 shooting with four 3-pointers for UCLA (31-4).
    4 takeaways from Day 1 of Neil Gorsuch confirmation hearings

    4 takeaways from Day 1 of Neil Gorsuch confirmation hearings

    Questions have to be pointed and require answers that don't fall into the category of cases or issues the Court may decide. Questioning will begin on Tuesday, and votes in committee and on the Senate floor are expected early next month.
    Hundreds of Northstate athletes compete at the Special Olympics

    Hundreds of Northstate athletes compete at the Special Olympics

    The Austria Games weren't the first time Englund has squared off against the world's best snowboarders. Although Englund will return with gold, she wasn't the only Alaska native to win a medal in Austria.
  • Esperion Therapeutics, Inc. (ESPR) has Current Market Capitalizaion of $534 Million

    Esperion Therapeutics, Inc. (ESPR) has Current Market Capitalizaion of $534 Million

    The best target price is $45 though the lowest target is $12.5. (JUNO) to Neutral by settling a price target of $24 on 2/01/17. It is the known average of the actual calls, that is strong buy, hold, sell etc. made by the brokerages for any given stock.
    War Machine found guilty on 29 charges in Christy Mack case

    War Machine found guilty on 29 charges in Christy Mack case

    The Associated Press doesn't usually identify victims of alleged sexual assault, but Mack gave permission to use her name. Koppenhaver, 35, made his UFC debut at The Ultimate Fighter 6 Finale, where he won KO and Fight of the Night honors.
    Angry mob pelts stones, set police vehicles ablaze

    Angry mob pelts stones, set police vehicles ablaze

    They allegedly set afire some police vehicles and also vandalised the police station in the wee hours today, he said. TOI report revealed that stone pelting at two other police vehicles was also reported from the spot.
  • North Korea 'conducts high-thrust engine test'

    North Korea 'conducts high-thrust engine test'

    It also claims the cause of death was a "heart stroke" and accuses Malaysia of conspiring with its enemies to tarnish its image. North Korea's nuclear facility at Yongbyon is well known, but striking it could cause an environmental disaster.
    Kidnapped Alabama Nursing Student Tells Her Terrifying Story

    Kidnapped Alabama Nursing Student Tells Her Terrifying Story

    Brittany jumped with nothing to lose but also nothing to come back. 'This stranger took everything from her'. She then waited for him to get back in the vehicle , but the robber pulled out quicker than she expected.
    Warning of snow issued by Met Office

    Warning of snow issued by Met Office

    Patrick's weekend in most of the country, but it would appear as if the break from the miserable weather was only temporary. Unsafe road conditions are expected overnight and in the morning, with a snow and ice warning in place across the country.


Most liked

"Ivanka Trump Sued for Alleged 'Unfair Competition" by Clothing Rival
The San Francisco-based company requests Ivanka be hit with a restraining order keeping her from selling in California at all. In an email to NBC News, a rep for the Ivanka Trump brand declined to comment on the lawsuit.

First Autistic Muppet to debut next month on "Sesame Street"
Jeanette Betancourt , senior vice president of USA social impact at the nonprofit Sesame Workshop , said in a statement . But the inclusion of Julia on the live-action show is important-so much so that she's making headlines around the world.

Federation Internationale de Football Association bans Ghanaian referee Joseph Lamptey for life for 'match manipulation'
Lamptey can appeal to Federation Internationale de Football Association and then the Court of Arbitration for Sport. Ghanaian official Joseph Lamptey took charge of the game between South Africa and Senegal in November a year ago .

'Wonder Woman' Gal Gadot welcomes baby daughter Maya
On Sunday, Gadot shared a shot of herself striking a pose with her baby bump and husband by way of a mirror selfie. Gal Gadot and Yaron Versano arrive at the 74th Annual Golden Globe Awards in 2017.

Handgun, rifles seized from Dixon High School student
Only through the cooperation of students and quick action of our staff were we able to apprehend this person. The school is also investigating this incident and will be reviewing safety procedures as a part of this.

Jeremy Lin (ankle) not expected to play Tuesday for Brooklyn
The Dallas Mavericks are averaging 98 points on 44.1 percent shooting and allowing 100.1 points on 46.8 percent shooting. He scored 20 points off the bench, making 8-of-12 from the field. "He kind of iced it for us there", Nowitzki said.

European Union sees Brexit summit in late April or early May
They include putting issues like continuing working together on issues like security at the core of what we are doing. Scotland's nationalist first minister, Nicola Sturgeon, is seeking a referendum on independence within two years.

Federal Bureau of Investigation head says no evidence of Trump wiretap claim
A few days after saying Clinton's emails were being investigated, the FBI cleared her of doing anything unethical. Comey said the Department of Justice as a whole also had no evidence that Trump Tower had been wiretapped .

Family members: 10-year-old boy fatally shot at Newark home
The death marked the city's fourth fatal shooting this week, according to authorities. Prosecutors haven't filed charges in connection with the shooting.

Old whatsapp status makes a return on the app
If you wish to try this feature immediately, you must sign up for the beta program , and be on the latest beta version 2.17.110. This feature is now called "About and phone number" and users can access it by going to their profile tab into settings.

Amazon Cancels Delivery Of A Pair Of Editions
According to their response, there was a major defect on the entire inventory Amazon had received from the manufacturer. After investigating the issue, the developer and Amazon both confirm that the cancellation was just a mistake .

16 killed in Ghana waterfall accident
He added that 11 others were injured in the incident, including one of the school administrators who was in charge of the trip. Bawumia donated an undisclosed amount of money to the University of Energy and Natural Resources students on admission.

Oregon Rallies Late To Beat URI, Reach Sweet 16
Rhode Island now averages 73.7 points per game on offense while the defense gives up just 65.1 points per game. The Rams took the lead early on in the game but OR caught up for a nail biting second half.

Dave Chappelle Explains Why He Ended 'Chappelle's Show'
His highly-anticipated Netflix stand-up special will be available to stream Tuesday (March 21). At the end of the day ... you don't have that much control over it.

Milwaukee Bucks: Grades From 117-92 Loss To Golden State Warriors
OAKLAND, Calif. - The Golden State Warriors overwhelmed the Milwaukee Bucks 117-92 as Stephen Curry finally broke out from distance.